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Happiness and public policy

12 Jul 2011 | Richard Layard

Happiness is now on the agenda, and about time too. But is this
just a trendy fad, or should there be a permanent change in the way
we think about the purposes of politics?

There has to be a permanent change. It is not of course new to say
that the aim of government is to enable people to lead happier
lives. In the eighteenth century enlightenment it was standard to
believe that the best society is where the people are happiest, and
the best policy is what produces the greatest happiness. These
admirable views did much to inspire the social reforms of the
century that followed. But in many cases it was difficult to apply
the principle because so little was known about what makes people
happy. However the last thirty years have seen a major scientific
revolution, and we now know much more about what causes happiness -
using the results of psychology and neuroscience.

The first thing we know is that in the last fifty years average
happiness has not increased at all in Britain nor in the USA -
despite massive increases in living standards. This is because
above an average income of about £10,000 per head richer societies
become no happier than poorer societies. Richer individuals are of
course on average happier than poorer people in the same society,
but this is largely because people compare their incomes with other
people. If everyone gets richer, they feel no better off.

In rich societies like ours what really affects happiness is the
quality of personal relationships. Always top comes the quality of
family life, or other close personal relationships. Then comes work
- having it (if you want it) and enjoying the meaning and
comradeship it can bring. And then comes relationships with friends
and strangers in the street.

Some societies are much happier than others - and Scandinavian
countries always come out near the top. This is largely because
people trust each other more there than in other countries. In
Britain and the US the number of people who believe that "most
other people can be trusted" has halved in the last fifty years,
and this reflects the growth of an individualism which makes
personal success more important than almost anything else.

These facts call for a revolution in how we think about ourselves
and about how the government can help us to flourish. It becomes
clear that faster economic growth is not the most important
objective for our society. We should not sacrifice human
relationships nor peace of mind for the sake of higher living
standards (which will be growing anyway).

We need a fundamental rethink of our policy priorities, which would
give higher priority to family life and the way people support each
other in communities, at work, and as individuals. This debate is
only just beginning, but here are a few obvious points.

Expenditure on mental health

When it comes to public expenditure, there is one obvious area of
shameful neglect. One in six Britons is currently a diagnosable
case of clinical depression and/or chronic anxiety disorder. Only a
quarter of these people have been in treatment. For most the only
available treatment has been pills prescribed by a non-specialist
GP. This was in flagrant contravention of NICE Guidelines which say
these people should also be offered modern evidence-based
psychological therapy, which is at least as effective as drugs.
That is what the majority of patients want, and, if they cannot
have them, many patients prefer to go untreated. This volume of
untreated suffering is especially scandalous when it turns out that
treating it would involve no net cost to the Exchequer - due to the
savings on incapacity benefits and lost taxes. [1]

So why has this situation persisted? It reflects a deeply-rooted
form of materialism or what one might call 'objectivism' - a belief
that the subjective world is too fuzzy for us to take it seriously.
Yet the subjective world is what we experience each moment of our
lives. In truth the severity of depression and anxiety states can
be measured quite accurately, and the best therapists are as
dedicated as are physicians and surgeons to measuring the impact of
their treatments.

Fortunately the last government and this one have taken action to
put this right. By 2013 the Improved Access to Psychological
Therapy Programme (IAPT) should provide evidence-based therapy to
all who need it throughout the country. And it is beginning to be
extended to children.

But at the same time many people with other mental health problems
face the risk of cuts in expenditure. These include people with
psychoses, learning difficulties and diseases of old age. Mental
health trusts are in danger of being cut in order that physical
healthcare can have more money to pay for more expensive
treatments. Yet mental illness has a bigger impact on happiness
than most of the illnesses treated in the NHS. It's another example
of discrimination against subjective experience in favour of what
appears to be more objective.

Building character in childhood

It would of course be much better to prevent mental illness than to
have to treat it. This ought to be a major role of our educational
system - to implant the seeds of a happy life and of one that
brings happiness to others.

Most schools pay too little attention to this. It is not easy to
teach but well-tested materials are becoming available at an
encouraging rate. (One example is the Penn Resiliency Programme now
being used in three of our local authorities.) [2] Teachers should
be taught to use these materials, and in secondary schools Personal
Social and Health Education (PSHE) ought to be a specialist
subject, in which teachers can specialise in their post-graduate
certificate in education.

Parenting

Another obvious area where the state has to become more involved is
the quality of parenting. If bad parenting produces crime and bad
behaviour - let alone personal misery - the state must act at many
levels.

Parenting should be taught in schools. Above all people should
recognize the huge responsibility involved in having children well
before they decide to have their own. Then parenting classes should
be offered to parents around their first pregnancy, and these
should cover not only biology but also the emotional side of
child-rearing - including its impact on the relations between the
parents. And finally there should be high quality services
available when parents run into trouble. There exist evidence-based
interventions which should be readily on offer. [3] Here as
elsewhere, what is different from the past is that the new
interventions rely less on the few people of great wisdom and more
on the findings of science which can be implemented by ordinary
mortals.

Advertising and gambling

Regulation should also reflect new priorities. Take two examples
where tastes are clearly affected by public policy. Advertising is
clearly meant to change our tastes, so we are entitled to ask, Is
the change for the better? Undoubtedly some advertising provides
valuable information. But a lot of advertising makes us feel we
need things we previously didn't need. The advertiser may have only
wanted us to buy his brand rather than another. But the overall
effect is to make people want more. This means that we are less
contented with what we have. The most serious effect is on
children, who put parents under intolerable pressure to buy the
latest doll or the coolest make of footwear. The waste is
extraordinary, and children get the idea that they need this vast
array of spending just to be themselves. That is the reason why
Sweden bans commercial advertising directed at children under
twelve. [4] Every country should learn from this example.

Similarly in the case of gambling. Laissez faire economics says,
'If people are willing to pay, let them spend their money as they
want.' But the expansion of gambling can so easily produce addicts.
Under existing gambling laws there are at least 150,000 gambling
addicts in this country, and this addiction blights both them and
their families. If gambling laws are eased, some people might gain
a little extra enjoyment at the cost of increased misery for
others. It is hard to see how this could be justified.

Taxation and redistribution

In almost any political philosophy, redistribution is one role of
the state. The greatest happiness principle bases the case for
redistribution partly on the diminishing marginal utility of
income. If there were no efficiency cost of redistribution, this
fact would argue in favour of total income equality. But there is
an efficiency cost, since taxes (spent on services) do discourage
work effort.

But happiness research puts work effort into a new perspective.
Individuals work partly in order to raise their income relative to
others. But it is impossible for the average person to raise his
income relative to others. So some of the work effort is wasted. It
is like an arms race. Thus, if taxes somewhat discourage work
effort, they are orchestrating a desirable arms-limitation
agreement. They are reducing the unnecessary sacrifice of family
life and social life that excessive work entails. They are
protecting the work-life balance.

Existing knowledge shows this is a serious issue, but does not
offer a precise figure for policy use. So I am not saying that
taxes should be higher than they are - but they should be higher
than if you had not considered this point.

And there are other arguments for a more equal society.
Cross-country evidence shows clearly that better social conditions
go with greater equality. [5] Societies with more equal incomes
also have more equal relationships and higher levels of trust. So a
happier society would almost certainly have to be more equal.

Conclusion

We are at the beginning of a major revolution in public values,
reflecting two main forces. One of these is our historical
experience. Increasingly people realise that ever-increasing
affluence brings less enhanced satisfaction than they expected.
There is also a major revulsion against many blinkered forms of
managerialism that appeal only to self-interest. People are looking
for something more in life - involving less selfishness and more
devotion to a common cause.

At the same time there is the new science of happiness, which
provides a more accurate account of what makes people happy than
the cruder forms of elementary economic theory. It shows for
example that people who are mainly concerned with their own welfare
are less happy than those who are more concerned with others. And
it shows that these attitudes can be affected by public
policy.

This points the way for a revolution in political philosophy. At
present we have no coherent political philosophy that inspires our
society. Rampant individualism has filled this vacuum and
contributes to alienation from the political process. But
individualism is inherently inconsistent. It appears to promote the
interest of individuals but it cannot do so, because the other
individuals we would like to encounter would not be
individualistic.

Instead we need a political philosophy which is intrinsically
defensible but also internally consistent. Consistency means that,
if people use the philosophy in their individual lives, the result
will be the society which the philosophy advocates. The principle
of the greatest happiness satisfies this requirement. We want a
society where people desire to produce as much happiness in the
world as they can. If everyone thinks like that, they will all end
up happier. This is a consistent philosophy.

It would, of course, involve reversing a trend, and many people
assume that trends go on forever. That is not how we should read
history. In many areas we see something more like cycles. For
example we can observe clear ups-and-downs in the extent to which
social responsibility has been stressed in our national lifestyle.
In the early seventeenth century it was de rigueur; while the
eighteenth century was more easy-going. The nineteenth century saw
increased social responsibility [6]; while the last forty years
have seen increasing individualism. It is quite possible that the
current trend will be reversed again in the coming decades, as it
was two hundred years ago.

We do not need a return to Victorian values, some of which were
pretty gloomy. Instead, we need a philosophy which fully values
happiness and enjoyment, but at the same time enjoins us to strive
for the happiness of others. And that is the philosophy of the
Greatest Happiness.

---

Lord Richard Layard is Emeritus Professor of Economics and Head of
the Well-Being Programme at the London School of Economics. He is a
co-founder of Action for Happiness.